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Capital Ideas Newsletter Q2 2012

The second Canadian issue of Capital Ideas, our quarterly newsletter dedicated to business selling, business buying and financial resources for mid-market companies.

Maximizing Business Value Before Exiting

The Difference Between Being Ready to Sell and Being Prepared to Sell

By Peter Moore, Managing Director, Portland, Maine Office

Often when we meet a business owner for the first time and he proclaims he is ready to sell his business we soon find after a few key questions that the owner is not properly prepared to sell his company.

When it comes to the sale of your business readiness is usually an emotional state of mind. I’m ready to let go. I’m tired of this business and ready to move on”, ... Read more

Do Your Diligence Before You Go To Market

Be Prepared

By Jim Zipursky, Managing Director, Omaha Office

What exactly is Due Diligence as it pertains to deals?

We hear the term all the time and have heard various definitions, including:

Due Diligence is the opportunity for buyers to beat up sellers on price, or;

Due Diligence is the opportunity for lawyers and CPAs to kill deals, or;

Due Diligence is the time for sellers to come clean with the truth about their companies

While each of the aforementioned definitions are all humorous, none are technically correct nor accurate… Read more

Feature Acquisition

Situation: Toronto, Ontario-based E.F. Walter is a family-owned company over 100 years old, in the third generation of ownership. In their 2011 strategic plan, E.F. Walter’s management team decided that their Industrial Foam Division was no longer a core business and wanted to divest the industrial foam operation by early spring 2012. By fall 2011, E.F. Walter’s management team had taken some steps to divest the division but had made no real progress. They then hired CFA Toronto West in mid-November 2011 to handle the divestiture of this division.

Solution: With an aggressive timeline in mind, CFA ran a competitive bid process to sell the business and contacted top foam conversion businesses in Canada and USA. By early February 2012, a draft letter of intent (LOI) was received along with other expressions of interest. After 6 weeks of negotiations, primarily addressing the continuity of employees, the LOI was finalized mid-March. The transaction was completed April 30, 2012, just 5 months from start to finish. E.F. Walter’s Industrial Foam Division was acquired by Jacobs & Thompson, a leading Canadian competitor. Toronto, Ontario-based J&T is the market leader in industrial foam products. This transaction was a perfect strategic acquisition for J&T, and released E.F. Walter’s management team to focus on their other divisions.

About CFA

Corporate Finance Associates (CFA) is a founding member of ICFG, the 14th largest mid-market M&A firm in the world with over 40 offices in North and South America, Europe, and Asia. In 2011, it completed 97 mid-market transactions, of which 15 were cross-border. Since 1956, CFA has completed more than 5,000 transactions.